top of page
  • Christian Armbruester

Hope, Revisited, Again

It would seem we made the bottom in the S&P 500 sometime in October last year. Back then, we were worried about inflation, earnings, the geopolitical environment and we almost broke 3500. Now, we are still worried about inflation, earnings, the geopolitical environment, but we somehow climbed above 4400. Are we missing something here?

Everything is relative. Inflation is high, but a lot lower than it was. Growth is low, but higher than it has been, and sentiment has shifted from severe unease to almost neutral. Of course, on an absolute basis, nothing has really improved just yet. Our energy bills are still outrageous, mortgage costs have exploded, and more and more of consumer spending is coming from credit card debt, all of which is not exactly conducive to a recovery in earnings.

Never fear, AI is here. Maybe it is because we have all seen Terminator (1984), but everyone seems to be an expert on artificial intelligence. It will solve everything. Our productivity crisis, lawyers making way too much money, and we won’t have to type things into Google again. I suppose that is why NVIDIA is trading at 40 times book value and 220 times earnings. Reminds me of a quote from another great movie: hope is a dangerous thing (Shawshank Redemption, 1994).


Recent Posts

See All


bottom of page